Humza Yousaf gives major independence speech with new policy unveiled

Humza Yousaf set out the Scottish Government’s plan for industrial strategy and the economy in the event of Scottish independence during an address at Glasgow University on Monday.

The FM described how this new government department would be responsible for designing and delivering new policy areas that would be gained through independence from Westminster.

Joining the European Union as an independent country and large-scale investment would be two other key areas to build a strong foundation for the economy, Yousaf explained.

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The FM also criticised the UK Government’s track record on industrial policy, adding that its failures “invite reflection”.

In a keynote speech, Yousaf said: “In an independent Scotland we would establish a new Ministry for Industrial Policy to ensure industrial policy has appropriate profile and status within and beyond government.

“This new government department would have ultimate responsibility for the design and delivery of industrial policy with the new policy levers of independence.

“A stand-alone ministry will demonstrate [a] strong, long-term commitment to industrial policy.”

An Industrial Policy Council would also be established, the FM added, to provide “independent advice, direction, monitoring and evaluation”.

“It will help to build buy-in and consensus on strategy design and, crucially, contribute to identifying what is working and what is not,” Yousaf added.

“The council will comprise experts and practitioners from business, academia, and unions and draw in expertise and experience from beyond Scotland’s borders.

“It will be established on a statutory footing in order to demonstrate long-term commitment and avoid the constant institutional tinkering that has plagued UK industrial policy. Members will be appointed for a minimum term.”

He added that the council would “engage directly” with Scotland’s First Minister and “all of government”, not just the ministry.

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“It will also have an important role in promoting innovation and maximising new economic opportunities,” the FM said.

“A key initial task will be to ensure the broader institutional infrastructure – including the enterprise networks, Scottish National Investment Bank, Skills Development Scotland and relevant industry leadership groups - is working effectively in the new context of independence, in pursuit of agreed industrial policy goals.”

Yousaf added that he would “welcome views” on the structural remit and make-up of the council, and that Scottish Government ministers will have “more to say” about its approach to “developing consensus building institutions” in upcoming speeches.

The FM noted industries such as the space sector, manufacturing, and green sectors, such as hydrogen production, offshore wind and carbon capture storage (CCS) as key tenets of industrial policy.

He added: “Crucially for Scotland, industrial policy can no longer be synonymous just with manufacturing – any effective industrial policy will have to recognise, and seek to expand on, Scotland’s dynamic, outward-looking and highly productive tradable services.”

Criticising the UK Government’s “poor record” on public investment, Yousaf pointed to cuts made by Chancellor Jeremy Hunt during the Autumn Statement, a “real terms cut” to the UK’s capital investment budget.

The FM added that this has a “major knock-on effect” for Scotland, with the capital block grant forecast to “contract by almost 10% in real terms over the next 5 years”.

A special fund would be created to “kick start investment” in an independent Scotland, Yousaf said, with an “initial estimate” that the fund would be used to “undertake capital spending of up to £20 billion over the first decade of independence”.

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“It would be financed through oil revenues and if needed borrowing,” he added.

“Scottish Government modelling has demonstrated that investment spending leads to an increase in GDP, long-term productive capacity and provides a sustained boost to the economy.”

The Scottish Government would also “seek to align” the fund priorities with those of the European Commission and Scotland’s industrial policy, he added, such as EU connectivity, CCS, and floating offshore wind.

Asked if he had concerns that committing to using oil and gas for at least a decade after independence, and using the revenues to pay for infrastructure, could potentially put off voters who are concerned about the climate crisis and continued use of fossil fuels from supporting independence, the FM said: "Revenues from oil and gas can help us to drive the urgency in that transition to renewable technology, to create the ports, the CCS, the hydrogen pipelines - all of that requires capital investment.

"What better use of that revenue I think than to help us create that net zero infrastructure and prepare for the transition?

"Oil and gas will still play an important role in Scotland’s future."

Scottish Greens environment spokesperson Mark Ruskell said that it was "right" that corporations are "made to pay" while fossil fuels are phased out, when asked for the party's position on using oil and gas to fund infrastructure projects. 

“We can ensure the oil and gas companies who have plundered the North Sea for generations are made to pay back to a society that has seen its environment decimated in the name of profit," the MSP said. 

“It can be forced to help give its workforce a renewable transition, one that is founded on clean energy in a world where we are building, not burning our future. 

“That is the reality of the situation, but it should not and must not be viewed as an excuse to develop any more oil and gas fields or extend their lives a moment longer than is absolutely necessary."